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Comment by tptacek | Hacker News Reader

A recent article made the case against disregarding domain names: while Square used to be SQUAREUP.COM, and Facebook used to be GETDROPBOX.COM, neither is today; both have acquired the bare domain name corresponding to their name and use them exclusively.

The issue here is then, once you make the decision to be "getFOO.COM", the better you do, the more expensive FOO.COM becomes. There is no guarantee the price for the "real" domain name will ever be reasonable. It may instead become intractably expensive.

If you're committed to "getFOO.COM" forever, the strategy works just fine. But when I see people talk about how Facebook used to be "thefacebook.com", I get itchy. How much would you have charged for "facebook.com" 4 years ago?

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When you're a kid in a dorm room (even a Harvard dorm room), the cost of "facebook.com", low as it might have been at the time, is already intractable. When you're a funded Silicon Valley startup, the cost of "facebook.com" is higher in absolute terms, but relative to your buying power is more affordable.

Having such a successful startup that domain squatters will charge more for your domain is a good problem to have. The most any domain squatter will earn for the domain is the most they can get from you anyway--they can't sell it to a competitor since it'll be subject to immediate trademark dispute, and they can't sell it to anyone else since no one else will pay as much as you would. I don't think it would ever actually become intractably expensive--the business model doesn't even make sense that way.

Domain "squatters" buy domain names and keep them to sell.

As long as they aren't infringing on a trademark it is a legitimate and legal business.

While I don't really even like the word speculation that would more accurately describe what is going on. People might not like it or get frustrated that they can't buy the domain at the price they would like. That's simply entitlement. And they also assume that if the "squatter" didn't buy the domain it would be just sitting waiting for them to purchase for $10 for their startup. In a free market system that would simply not be the case.

Someone thought of an idea and purchased domains at the going rate (or more later on if not the original owner) and now the domain has value. If it was so apparent the domain had value to everyone then everyone would have done the same thing and they didn't. This is really no different than any type of gamble or investing someone does in business or in real estate.

You can come up with any scenario to try limit domains to "actual use" and it will fail on it's face. There is no way to have the growth of the Internet that we have and police how someone uses their domain. This is not gas or war time rationing. There are many options if the domain that you think is perfect for your company is taken by someone else. Find a different domain. Get over it.

You seem to be arguing against a comment I didn't even write.

I'm taking issue with the use of the word "squatters" in the way you used it.

It's the commonly used term for the business model. Sorry if you find it offensive, but you've done a masterful job of missing the damned point.

Yeah I don't understand what you're arguing against either. The fact that you think domain squatting is a great, legitimate business is sort of irrelevant. Maybe you don't like the term "squatting" because you keep putting it in quotes, well even it is the best business in the whole wide world, it's still squatting. You don't like the word "speculation." You seem to not like to call things what they are ... Anyway, the parent did not make a case for why they're bad guys. Get over it. :)

"Yeah I don't understand what you're arguing against either."

I'm arguing against the use of the word squatting to describe people who buy domain names with the intent of reselling who are not infringing on obvious and famous trademarks.

Squatting is identified commonly as:

"Squatting consists of occupying an abandoned or unoccupied area of land and/or a building - usually residential - that the squatter does not own, rent or otherwise have lawful permission to use."

http://en.wikipedia.org/wiki/Squatting

Specifically if we replace the real estate with the domain name we can see that the person who has acquired the domain name that they wish to sell does "own, rent or otherwise have lawful permission to use".

Certain words and expressions have negative connotations and "squatting" is certainly one of them. They are used incorrectly many times by writers to get people's emotions up and band them together against something the writer is trying to achieve.

I don't see the logic here at all. If I start an application and it's called "buffer" and I have no money and the domain buffer.com is being sold by some domain squatting pirate for $200,000 then obviously I can't buy it. The choice then is to find a name like squeebo.com or whatever that no-one has yet or go with a less popular TLD like .co (which seem to fill up just as fast as they're released).

However, if I go with bufferapp.com and get it for $8.95 or whatever the going rate for a domain is, then if/when my company blows up and becomes Buffer the unstoppable international juggernaut, how valuable is the domain buffer.com?

No-one's going to start a company called "buffer" any more. So the value is in direct type-in traffic and monetisation through AdSense revenue. No-one else is going to buy it - you've got a market of one buyer and one seller. If the buyer decides to take his ball and go home, you're shit out of luck and have to monetise the domain yourself.

What determines whether or not facebook.com will remain "intractibly expensive no matter how big you get" (ie. facebook.com now has more money than most countries) is whether or not the type-in traffic for the domain facebook.com can be monetised using ads for more than facebook.com is willing to pay for it.

I have no idea about the stats behind type-in traffic but a lot of stuff I've heard indicates that "mainstreamers" would tend to type "facebook" into Google more so than the address bar so I'd be very surprised if the value of the domain didn't peak pretty early versus what the owner could have done with the money had they sold for a million or so in the first few years that facebook started to blow up.

Overall, though, I'd say that the fact there is only one buyer for a domain once a company establishes itself, and the fact that the risk of choosing a shitty name to suit the shitty domains you can afford, or of spending a lot of money on an awesome domain before you've even been able to go to market (holler.com anyone?) are far greater than the risk of having to pay what is comparatively a pittance once your company is making money hand over fist and needs to "cross the chasm" in order to continue to grow.

it is not a one buyer really. a competitor would also be interested in your domain name.

It may be the case that in some weird domain squatting affiliate marketing universe, someone would be able to make money from basecamp.com if 37 signals still ran things on basecamphq.com, but are you honestly saying that if they weren't, then Atlassian would seriously be interested in buying basecamp.com for some nefarious purpose? That they'd have been able to somehow prevent basecamp from becoming the dominant player it has by redirecting basecamp.com to the Jira homepage so that people would try and find basecamp.com then just think "fuck it, well I'm here now, I'll just use this".

I don't buy it ... do you have any actual examples of this having happened?

> Facebook used to be GETDROPBOX.COM

Perhaps you mean "thefacebook.com?"

Not long ago I read on HN that tptacek is always right about everything. I think we can safely say that Facebook used to be GETDROPBOX

That's the really obvious reason that everyone I know is afraid to start a company without getting the .com first.

But the OP makes a good point that it hasn't been as big a barrier as we have feared. Square, for example, is a superb name and I think they made the right decision to proceed with Squareup.com, even though I thought it was foolish at the time. Turns out they were right, and I was wrong.

Square is a damned good name. I wouldn't have had the cojones to proceed with the name, but they did, and good for them.

"There is no guarantee the price for the "real" domain name will ever be reasonable. It may instead become intractably expensive."

Thanks for saving me the time of saying exactly that.

I really can't stress this enough from my experience in this area both on the buying (and assisting sellers) side.

OP: "Pick a great name, then add something to get a domain name. It really doesn’t matter all that much - whether you get the domain later or don’t. Then get building!"

This is scary advice. And when contrasted with the examples given is dangerous. As you say "If you're committed to "getFOO.COM" forever, the strategy works just fine."

But then if you are "bufferapp.com" don't brand as "buffer" in your logo on your website and marketing materials, brand as "bufferapp".

This is the company naming article you're probably referring to: http://thenextweb.com/entrepreneur/2012/04/22/before-naming-...

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